Nextbillion Technology Pvt. Ltd, the parent company of the Unicorn Groww, on Tuesday said it has entered into a definitive agreement worth Rs 175 cr, with Indiabulls Housing Finance Ltd (IBHFL) for the acquisition of the mutual fund business of its subsidiaries Indiabulls Asset Management Company Limited (IAMCL) and Indiabulls Trustee Company Limited, trustee of IAMCL.
Groww will invest cash equivalent of ₹100 crore, and is subject to regulatory approvals by Securities and Exchange Board of India (SEBI).
The transaction is likely to be concluded by 30 June 2022, IBHFL mentioned as a part of its filings with Bombay Stock Exchange (BSE).
With this acquisition, Groww can create new investment products, besides its existing model of distributing mutual funds directly on its platform.
“Over the last five years, we have made investing simple and transparent for retail investors across the length and breadth of the country. We have experienced the power of technology in enabling the access of financial services to even those who do not live-in metros or who are not HNIs. With the capability to create products, we plan to make mutual funds even more accessible by making them simpler, more transparent, and by lowering the cost further,” said Lalit Keshre, chief executive and co-founder of Groww, in a statement .
“The real estate asset management business is complementary to the core business of the company and the sponsor (IBFHL) plans to grow this business in partnership with global player(s). Therefore, the mutual fund business does not remain a core focus area for the company,” said Indiabulls, as a part of its filing.
“We have made the decision to divest our interest in the retail mutual fund business to be able to consolidate capital and provide greater focus in building the company’s real estate asset management business by way of AIF, in line with the company’s asset light strategy,” said Gagan Banga, vice chairman and managing director, Indiabulls Housing Finance.
At present, Groww claims to have 15 million users, with 250,000 systematic investment plans available each month on its platform. Between the period of September 2020 and April 2021, it has gathered nearly 7 million users, with 60% of its users based in tier-II cities and beyond, the company said.